Streets on the Thames

London's affluent are increasingly shunning penthouses for a more genteel life on the water

By

Charlie Corbett

Updated March 8, 2011 12:01 a.m. ET

Most drivers that wend their way down the north side of the River Thames in West London will barely have noticed them. Nor even some pedestrians. However, a cursory glance over the embankment wall, opposite the fashionable mansion blocks of Chelsea, reveals a parallel universe. Stacked against one another, in a jumble of jaunty angles and cheerful colors, lie the houseboats of Cheyne Walk.

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With names like 'Rudyard Kipling' and 'Joseph Conrad', this mêlée of different boats, joined to one another by sturdy green painted pontoons, conjures up another world: More Dickensian ragamuffin than Chelsea Arts Club. But don't suffer the illusion the owners of these 'chattels' are in any way nearing the bottom rung of society's ladder. Far from it.

More and more of London's affluent are choosing to sell-up onshore and take to the water in a houseboat. London's 280 Thames-side residential moorings have come under heavy demand from a new generation of houseboat dweller. Gone are the bohemians and artists that might have slummed it on the water in 1960s and 1970s. Today's houseboat owner tends to be rich, sophisticated and in search of a more genteel style of living – with more than half an eye on the investment opportunity.

"The old perception of houseboat living was of a 'bucket and chuck it' lifestyle and a slightly bohemian community," says Philip Mason, co-owner of the Chelsea Yacht and Boat Company, which owns 60 moorings just off Cheyne Walk in Chelsea. "These days it could not be more different. The boats are expertly maintained by a permanent on-site team."

Simon Woodroffe, the millionaire founder of the Yo Sushi restaurant franchises and the Yotel hotel chain, was an early convert to the houseboat way of life. He owns three boats in Chelsea. "We often say: 'Shhhh don't tell anyone. It is no longer damp wet or smelly on the river and we have mains gas, mains sewage and residents parking'. It is like living in a New York loft, but on the river," he says.

His neighbor Rick Stroud, a successful film director and author, has lived on a houseboat for the past 15 years. He says that life afloat is in complete contrast to "the rather fly-by-night and hectic world in which I work".

"I find the millennial beat of the water, which has flowed here for thousands of years, a good antidote to the scatty world I live in," he says. "The tide comes in twice a day. You can go to sleep on dry land and wake up in the morning on dry land, but having floated in your dreams."

More Than Just a Chattel

The moorings for both Mr. Woodroffe and Mr. Stroud's boats are owned and leased out by CYBC. Mr. Mason bought the company with his business partner, Stephen Last, in 2005 and together the pair has transformed what was a struggling family business into a highly profitable operation. "The real value in this business is in the moorings," Mr. Mason says. The key to CYBC's success, however, was in being able to assure potential buyers they had security of tenure on their mooring. "At the start, we found that everybody had a mishmash of agreements so we had to standardize all the terms and conditions," Mr. Mason says. "The problem in the past was that there was no security of tenure. In law, a houseboat is deemed a chattel because it can be moved. This means it doesn't fall under the 1988 Housing Act." Mr. Mason and Mr. Last solved the problem by offering clients a 10 year license, with the option to renew. In terms of costs: In order to moor a 50ft boat for 10 years, owners can expect to pay a one-off fee of £30,000 (€41,000) for a prime river-front spot. The company also charges maintenance and mooring fees, which for a 50ft boat work out at about £7,800 annually.

Once purchased, a houseboat and its mooring can have great investment potential. According to CYBC, capital values have soared between 50% and 75% since 2005, far outstripping the neighboring mansion blocks of Chelsea in terms of growth and, according to Mr. Mason, almost recession proof. One CYBC client that bought a renovated houseboat in 2005 for £250,000 recently sold it for £375,000.

Due to the scarcity of moorings on the Thames, demand for houseboats in no way meets supply. This keeps prices high and climbing. "If you put another five moorings on offer, I could sell them overnight," Mr. Mason says, adding that some clients are prepared to pay in excess of £1 million for a boat.

This is not such good news for those with more limited means. Despite the bonus of there being no stamp duty on house boats, because of their 'chattel' status, it is almost impossible to get a mortgage. According to CYBC, loans of 50% against the value of a boat are on offer from some sources, but few owners take up this option and most remain cash buyers. For those able to afford a life afloat, the motivation is clear. "I think the truth is that in today's world everyone is looking for community. I always said when I got old I'd live on a commune and then I realized I already do," Mr Woodroffe says.

Mr. Corbett is reports editor at The Wall Street Journal Europe. He can be reached at charlie.corbett@wsj.com

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